As a property investor, learn to put into consideration the computations for the total cost of repairs on the tax deed sale property. Also, study and carefully analyze the period of time needed to be spent for renovation. After you are done with this procedure, add up the total cost of repairs as well as your bid for the property. This makes it easier to take account on your expenses.
Keep in mind that personal inspections are oftentimes not allowed in tax sale properties. Do remember to leave a budget for the hidden costs of repairs. However, get some price quotations of a property and its possible repairs so that you can get a good estimate.
Always practice due diligence when investing in tax sale properties. If you have time, visit the property and inspect it carefully because photos can only say so much. You would be surprised at the number of times investors have won at auctions, only to find out personally that the property does not measure up to their expectations.
With due diligence, you must also get a copy of the title and check for liens, at the registry of deeds in the area where the tax sale property is situated. Always note that a tax lien is a legal claim against a property. Also, remember that you would be responsible for the lien as foreclosed properties are sold on an “as is where is” basis.
Did you know that profits can be earned from tax foreclosure properties even without the need to go to auctions? Try this one on for size. Many tax delinquent properties are left with overages. This happens after the tax auction is done. Overages are the amount bids at auction that exceeded the amount owed in taxes. The amount is due back to the homeowners.
Most of the time, homeowners do not realize this. They think they’ve lost everything when the government forecloses their property. That’s where you come in. Research for the tax deed overages from the county office and find the owners. Connect the two and you’ll be earning finder’s fees.
Tax deed sales are an amazing way to get you started in the real estate business. With enough knowledge, keen eye, and property research, you can walk out of a property sale with your dream home for just the price of its back taxes. However, before you start bidding, keep in mind that there are still risks involved. A bit of common sense and quick thinking can assist you in securing that great deal.
One of the common risks that any new investor is going to encounter in tax deed sales is getting stuck with a worthless property. Lots of sales include not only real estate but raw land as well. These can be vacant lots in undeveloped locations. These types of properties can be a big financial problem. So, extensive research and due diligence can help you check out those properties before buying.
A sufficient budget is a must and you must stick to it. It would be difficult for you to get bargain deals at deed sales if you cannot afford to pay the cost. Moreover, there would be much temptation especially in bidding wars. It is best to avoid them.
The local government or county can basically seize tax delinquent properties of whose owners did not pay their taxes. Then, the county sells it at a public auction to any interested investor. The winning bidders get the tax deed to the property, giving them right of ownership.
Lots of wise investors readily take advantage of tax deed auctions. Since, it allows them to buy properties at prices well below in today’s market value. Some of them also use this as a way of flipping properties for more profits.
Most states in the U.S. offer tax deeds in which the redemption period ends usually in the day prior to the actual sale. However, there are a few exceptions to be noted like for example the state of Texas. Texas offers redeemable tax deeds.
Remember that Texas is one of the tax deed states. This simply means it does not offer tax liens. Each county in this state wherein a tax delinquent property is located, would be put up in an auction and sold off after two years of delinquency. This happens in many counties around Texas and as often as once a month. Moreover, during this time, a stable stream of tax delinquent properties is being sold to the highest bidders.